Hello lovely Rebooters!
Somehow, we’re really not sure how it happened so fast, the end of season 3 is upon us! We thought we’d go out with a bang by talking about money – money mindset, specifically.
Both of us have done some work on this over the past year or two and it’s been transformational and sometimes surprising, so here goes:
*cue dramatic music*
What is money mindset?
Money. Money is the thing that is hard to talk about, and maybe you don’t really want to think about because what you really want to do is your fabulous creative thing. But having money allows you to do your thing.
Money doesn’t buy happiness, but it’s more comfortable to cry in a Mercedes than on a bicycle – trite, but also true.
And money definitely smooths the way. But creatives tend to struggle most with pricing, charging – money!
And there’s the whole “working for exposure” problem – free does not pay your bills.
Recognising your old patterns
From running up debt in your youth to being unable to get a credit card when you needed one because you’d been too cautious about borrowing, everyone has a story about money.
It’s rare that we learn how to use credit well when we’re young – mainly because we’re usually still building our earning potential and learning where our priorities actually lie financially.
And we all definitely have some money stories (issues? hangups?) which come from our upbringing – our earliest teachings about money and how it works and what it is and what it does and how we use it. Or get it, in the first place.
Change came about, for both of us, when we realised (separately, but at broadly similar times) that we both wanted and needed to make money from our businesses – that breaking even and playing small was not going to get us the lives we were dreaming of and planning for.
It can be really interesting to look back at certain times of your life and look at how much you spent and what you spent it on. Was it experiences? Was it, erm, notebooks and books? Or was it random stuff where you have neither a material thing nor a memory to show for it?
When you change from a spending to a saving mindset, or a just getting by to a thriving mindset, there’s often something which triggers it – a new lifestyle, a particular purchase you want to make, a life change that happens. And when you have this in mind, it does tend to stop you spending money to fill an emotional hole.
Learning to love spreadsheets
Good god, that is not something we ever expected to write! But it’s true – getting to grips with your numbers and learning how to use a spreadsheet to show you proper information about your business and its financial health takes the fear away.
Even if the numbers aren’t what you’re hoping, you can see where you are and make plans for change.
What you put your focus on, grows – so focusing in on your money mindset means your money situation is highly likely to improve.
If you can identify where your blocks are, you can start to break them down. A common one is being stuck at what you last earned in a day job, another common one is self sabotage because you don’t feel like you deserve to earn money from something you find joyful.
Newsflash – those are limiting beliefs, not solid truths!
The clearer you can be about what is blocking you from earning what you want, the more likely you are to break those blocks – and you can also keep an eye on counter-evidence. Evidence that you can, in fact, smash your targets and earn whatever you want or need to from your creative business.
Clarity is everything, because then you can make a plan – you can start small and build on it, but you know what you’re aiming for, you’re not just working all the hours ever with only the vaguest idea of your hourly rate or whether you’re even covering your costs.
If you didn’t love your job, but you do love your business, and therefore are fighting some kind of weird feeling that you deserved to earn more in the job you disliked – you’re not alone, but tell that belief to get to fuck, please.
Limiting beliefs and practical considerations
Part of changing your money mindset is knowing your actual figures – the practical numbers of what you need to earn in order to cover your outgoings and pay yourself. Without those, planning is much more difficult – but your pricing will depend on those numbers, and a whole bunch of other decisions will, too.
“Charging what you’re worth” is a phrase that’s thrown around a lot in creative circles, and while it does have some merit, we’re wary of entangling the prices you charge with your actual worth as a creative human.
Everyone has different financial needs – and those practical things – your home costs, whether you’re on your own or with a partner or have a few kids kicking around the place, whether your business is kit-heavy or actually can be run with a laptop and nothing else.
Do you have premises, what kind of insurance – all of that stuff feeds into what your unique business will cost to run – and while we will deal with pricing in more detail in season 4, and while we are very keen that talented creatives don’t undercharge, it is very important that the basis of your charging is in your actual costs of doing business, rather than around your worth.
Equally, pricing without any thought as to your skills, your differentiation points and your worth is daft.
“Spend” vs “invest”
Spending on your business is fun and scary all at once. There should, however, be an element of considering it as an investment – what are you buying, what is it costing, and what will the return be – can you clearly see what that outlay is likely to bring you?
For example, Carla’s studio threw all her original pricing plans into disarray, but has both tangible and intangible returns – not needing to hire a space for meetings and certain types of shoots is tangible, the (unexpected) reputational standing for being a photographer with her own studio is very much intangible. Not to mention random. Extra lighting knowledge from having a space to practice in – tangible. Additional clients & ongoing work from contacts made from being in the studio – tangible but not necessarily expected.
But it’s good to consider what your spend will bring you – is it photos so you can really show what you do clearly, copywriting to draw in your ideal clients, a website that is beautiful and usable or specialist marketing? There are almost endless ways to spend money on your business, and having the right mindset can help to make sure that what you choose to spend has the right results.
(and yes, sometimes you really do need to spend before you’re ready to get the money coming in)
Something we have often noticed in self-employment, which is we think less obvious (or perhaps just happens less frequently) in salaried employment, is that if you have a bill you are completely freaking out about, quite often an unexpected client or booking will come in for nearly exactly the same amount, around the same time.
Conversely, sometimes you’ll get an extra booking you weren’t expecting, and the exhaust will promptly fall off your car and mean you spend that extra almost before you’ve seen it.
This balance does feel like it’s out of our hands – and the scientific explanation probably involves confirmation bias and how we perceive things. But big changes start with mindset shift, and when it does shift, you naturally become more aware of the things you can change, and of opportunities that will keep you moving in your chosen direction.
Your money mindset routine
We hate to break it to you, but this work is not one and done. It’s very much ongoing work, incorporating it into your everyday, your routine, your development work, so that you can keep on top of any new stories and blocks that sneak up on you, and replace them with stories and evidence of your new, positive money mindset!
One very easy thing to do is to start tracking every little bit of abundance – from finding a coin on the street to someone buying you a coffee, as well as your actual earnings. Noticing it, paying attention, means your awareness expands and it’s more likely to grow.
Discounting – our joint pet hate
We are both photographers among other things, and there is a terrible tendency among some clients to ask for a discount when booking. This can very quickly get very wearing, especially when you’ve worked out your prices properly.
Sarah had a quiet policy of only ever offering a discount to people who did not mention or expect one, and Carla worked hers out individually to start with – then realised this was kind of the equivalent of giving sometimes quite random connections cash gifts worth into the hundreds, so she stopped.
A lightbulb moment was a friend saying that if they love us and want to support our business, then they’d want to pay even more than a random client, because if they didn’t choose us they would be paying someone else anyway.
Trading is always worth considering, if and only if both parties are happy with the trade and would buy or book the other person’s thing anyway.
But have a contract in place regardless – even if it’s a trade.
A quick whizz through Profit First
A system we both use (with varying degrees of consistency between us!), Profit First is based on paying yourself profit before you take your expenses out of your income.
It’s a budgeting system, but very different from how you’re taught to budget. Taking profit and your pay out before you sort out expenses means you think about all of it in a totally different way. And of course you can tweak the suggested percentages based on your own business needs.
We’ll talk about this in more detail in a future episode, but definitely read about it!
And on that note…
That’s a wrap for season 3! We’ll be back in your headphones in October – stay tuned for dates and our very exciting lineup for next season.
Stay creative and wonderful, loves!